arm's length


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arm's length

adj. the description of an agreement made by two parties freely and independently of each other, and without some special relationship, such as being a relative, having another deal on the side or one party having complete control of the other. It becomes important to determine if an agreement was freely entered into to show that the price, requirements, and other conditions were fair and real. Example: if a man sells property to his son the value set may not be the true value since it may not have been an "arm's length" transaction. (See: contract)

References in periodicals archive ?
The adoption in the Act and the administrative practices of Revenue Canada of the OECD's contemporary conception of the arm's length principle in itself is not problematic.
According to Notice 2003-47, the IRS will insist on immediate income inclusion of the value of the deferred payment for the options, regardless of whether the sale is at arm's length.
The same criteria would be applied in determining whether the price is arm's length, and the Inland Revenue will have the same opportunity for review and adjustment.
TORONTO -- Goldeye (TSX VENTURE:GGY) is pleased to announce that it completed an arm's length private placement on December 30, 2005 for gross proceeds of $124,000, subject to acceptance by the TSX Venture Exchange.
Taxpayers asserted that the transaction was at arm's length, because the FCE paid FMV for the options (which was usually determined under the Block-Scholes method).
65-17 because the arm's length goal of section 482 is the same in both cases.
Howard Phee, announces that it has reached an agreement, subject to regulatory approval, with certain of its arm's length and one non-arm's length supplier of services and creditors to settle debt totaling $105,150 by the issuance of 525,750 common shares of stock of the Company at a deemed value of $0.
However, in this case, the agreement was negotiated at arm's length and serves as a real and discernable business for the charity.
any two corporations where either one controls the other by reference to the ownership of more than 50 percent of the shares entitled to vote, or both are so controlled by the same party), they are deemed, under section 251(l), not to deal at arm's length.
TORONTO -- Pele Mountain Resources (TSX VENTURE:GEM) ("Pele" or the "Company") is pleased to announce that it has completed, subject to regulatory approval, a private placement to eleven (11) arm's length subscribers of a total of 1,800,000 flow-through units in the capital of Pele (each a "Flow-Through Unit") at a purchase price of $0.
Further, the expenses were not ordinary and necessary and the transactions were not at arm's length.